United States v. Kordel

• Decision Date: 30 January 1948
• Docket Number: No. 9151.,9151.
• Parties: UNITED STATES v. KORDEL.
• Court: U.S. Court of Appeals — Seventh Circuit

164 F.2d 913 (1947)

UNITED STATES v. KORDEL.

No. 9151.

Circuit Court of Appeals, Seventh Circuit.

November 6, 1947.

Rehearing Denied January 30, 1948.

James W. Breen, of Chicago, Ill., for appellant.

Otto Kerner, Jr., U. S. Atty., and Robert C. Eardley, both of Chicago, Ill., William W. Goodrich, of Washington, D. C., Theron L. Caudle, Asst. Atty. Gen., and J. Albert Woll, U. S. Atty., of Chicago, Ill. (Vincent A. Kleinfeld, Atty., Dept. of Justice, of Washington, D. C., of counsel), for appellee.

Before EVANS and SPARKS, Circuit Judges, and LINDLEY, District Judge.

SPARKS, Circuit Judge.

Appellant was charged by three criminal informations with violation of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.A. § 301 et seq. He waived jury trial and, upon trial by the court, was found guilty and fined $200 on each of the twenty counts contained in the three informations. The appeal is from those judgments.

The facts as to the shipping of the drugs and the literature alleged to constitute the misbranding charged in the informations were entirely stipulated. Error is asserted in the court's finding that that literature "accompanied" the drugs in interstate commerce in the purview of the Act prohibiting the introduction or delivery for introduction of any drug that is misbranded. Other contested issues relate to the degree of proof necessary in a criminal proceeding under the Act, whether the Act should be strictly construed, and whether prosecution should have been by indictment rather than by information.

Appellant is a self-styled authority on nutrition and vitamins. He testified that he had written many papers on the subject of vitamins, herbs, minerals and nutritional diet subjects in general, securing the material for preparation of his papers from books. Operating under various trade names, he had been producing and marketing his own products since January 1941, largely through "health food" stores. The products appear to be, for the most part, compounded of various vitamins, minerals, and herbs. No charge of falsehood is made as to the principal labels printed on the packages in which each is contained. These labels give the name of the article and distributor, content, recommended dosage, and, in some cases, the alleged daily minimum requirement of the vitamins or minerals therein. Otherwise they give no indication as to their intended uses.¹ The misbranding charged is contained in a number of printed pamphlets and circulars, and one display placard. The modes of distribution of this literature differed as charged in the various counts of the informations. In some cases it was contained in the carton in which the articles were shipped. More often, it was separately shipped to the same consignees, and, in at least one case, a period of a year and a half intervened between the shipment of the product and the literature, respectively.

Section 301 of the Food and Drugs Act, as enacted in 1938, 21 U.S.C.A. § 331, prohibits the introduction or delivery for introduction into interstate commerce of any drug that is misbranded; section 502, 21 U.S.C.A. § 352, provides that a drug shall be deemed to be misbranded if its labeling is false or misleading in any particular; and section 201(m), 21 U.S.C.A. § 321(m), defines the term "labeling" to include all labels and other written, printed, or graphic matter "(1) upon any article or any of its containers or wrappers, or (2) accompanying such article."

It is now generally held that in order to support a misbranding charge under the Act as amended and revised in 1938, it is not necessary that the matter alleged to accompany the product be shipped in the same container (United States v. Research Laboratories, 9 Cir., 126 F.2d 42), nor even that it be shipped simultaneously. United States v. Lee, 7 Cir., 131 F.2d 464, 143 A. L.R. 1451; United States v. 7 Jugs, etc., Rakos, D.C., 53 F.Supp. 746; United States v. Paddock, D.C., 67 F.Supp. 819.

Appellant contends that the cases referred to are not applicable for the reason that all involved civil proceedings rather than criminal, and further, that the literature here involved was not only not shipped in the same carton with the products in all cases, but neither was it intended by him that product and literature should be placed together by the dealer to whom they were sent. His theory apparently is that the matter was not intended for labeling, but for advertising. He points to the fact that all of the printed matter was intended either to be mailed out or to be sold, as indicated by the fact that with the exception of the one display placard, each piece either contained a price mark or a mailing permit with space for address. This, he contends, supports his theory that product and literature were not to be distributed together, hence cannot be said to accompany each other.

We find two answers to this contention. In the first place, labeling and advertising are not mutually exclusive, and the same matter may serve both purposes. As the Court of Appeals for the Ninth Circuit states in United States v. Research Laboratories, 9 Cir., 126 F.2d 42, 45, "Most, if not all, labeling is advertising. The term `labeling' is defined in the Act as including all printed matter accompanying any article. Congress did not, and we cannot, exclude from the definition printed matter which constitutes advertising." See also United States v. Paddock, D.C., 67 F.Supp. 819. In the second place, the placing of the mailing permit or the price tag on the literature cannot insulate appellant from liability for introducing the drugs and their related descriptive matter into interstate commerce together by consignment to the same consignee for distribution by him. The evidence is clear that the booklets were actually displayed on racks close to the counter where the products were sold and that they were necessary to inform the purchasing public of the uses to which these products were to be put.

We agree with appellee that "the correct concept of `accompaniment' is one of a commercial or business association." As stated in the Rakos case, supra 53 F. Supp. 754, "misbranding has true significance only in terms of the consumer. * * * `Accompany' as used in this Act is used to describe a relationship between an article of drug and its labeling. Since there `can be no question that among the usual characteristics of labeling is that of informing a purchaser of the uses of an article to which the labeling relates' (citing the decision of this court in United States v. Lee, supra) the booklets here involved should be scrutinized from this viewpoint. In the sense just stated, if the booklets are not labeling, then the products * * * have none."

We, too, are convinced that the test is not of physical contiguity but of textual relationship. Viewed thus, the products and literature here involved were interdependent because without the latter, the former lacked the labeling necessary to inform the purchasing public of their uses and purposes — it is significant that the labels printed on the immediate containers did not indicate the purposes for which the articles were to be used. Hence, the literature was intended and essential to explain the alleged uses of the products. They constituted a supplement to the label physically attached to the product container. One of the health food dealers in whose store the Kordel products were sold admitted that if he were buying one of the products he would have to go to "reliable sources" to know to what use to put the product. Presumably those reliable sources were the booklets displayed in racks close by the counter where the drugs were dispensed or lying on the counters where they were available to the public and could be picked up and examined. Some...